Correlation Between Ambarella and Entegris
Can any of the company-specific risk be diversified away by investing in both Ambarella and Entegris at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ambarella and Entegris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambarella and Entegris, you can compare the effects of market volatilities on Ambarella and Entegris and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ambarella with a short position of Entegris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambarella and Entegris.
Diversification Opportunities for Ambarella and Entegris
Good diversification
The 3 months correlation between Ambarella and Entegris is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ambarella and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris and Ambarella is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ambarella are associated (or correlated) with Entegris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entegris has no effect on the direction of Ambarella i.e., Ambarella and Entegris go up and down completely randomly.
Pair Corralation between Ambarella and Entegris
Given the investment horizon of 90 days Ambarella is expected to under-perform the Entegris. In addition to that, Ambarella is 1.3 times more volatile than Entegris. It trades about -0.09 of its total potential returns per unit of risk. Entegris is currently generating about 0.04 per unit of volatility. If you would invest 10,767 in Entegris on January 25, 2024 and sell it today you would earn a total of 1,905 from holding Entegris or generate 17.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambarella vs. Entegris
Performance |
| Timeline |
| Ambarella |
| Entegris |
Ambarella and Entegris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambarella and Entegris
The main advantage of trading using opposite Ambarella and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambarella position performs unexpectedly, Entegris can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Entegris will offset losses from the drop in Entegris' long position.| Ambarella vs. KLA Tencor | Ambarella vs. ASML Holding NV | Ambarella vs. Axcelis Technologies | Ambarella vs. Teradyne |
| Entegris vs. Teradyne | Entegris vs. Ichor Holdings | Entegris vs. Amtech Systems | Entegris vs. Veeco Instruments |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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